Nillion

What it does

Nillion now calls itself the home of Encrypted Markets. Its main product since August 2026 is the Covenant: an instruction sealed on Ethereum that nobody can read until a stated condition is met, at which point it opens itself. Covenants run on Blacklight, Nillion’s staked node network, which moved to Ethereum mainnet in October 2026. The section below covers how they work and what they don’t yet protect.

That’s a change of emphasis. Nillion launched as “humanity’s first blind computer”, and that stack still runs. The core idea: computation on data without anyone (including the nodes processing it) ever seeing the data. It goes further than encryption-at-rest or data masking, computing on encrypted data using a combination of multi-party computationMPCMulti-Party Computation. A cryptographic technique where multiple parties jointly compute a function over their inputs without any party revealing its input to the others. Useful for shared computation on private data.Like a group of friends calculating the average of their salaries without anyone revealing their actual salary to the others. Each person contributes a piece of the answer, and the pieces combine into the result, but nobody learns anything except the average itself.MPC in the glossary → (MPC), homomorphic encryptionFHEFully Homomorphic Encryption. A cryptographic technique that lets you compute on encrypted data without decrypting it. The result is also encrypted, and only the data owner can read it. FHE is the strongest form of computational privacy.Like sending a sealed box of ingredients to a chef, having the chef cook a meal inside the box without ever opening it, and getting back a sealed box with the finished meal. Only you can unseal it and see what's inside.FHE in the glossary → (HE), and trusted execution environments (TEEs).

The network originally had a dual-layer architecture: nilChain (a Cosmos-based coordination layer for payments, stakingStakingLocking up a cryptocurrency to help secure a blockchain network, usually in exchange for rewards. The locked tokens act as a security deposit that can be taken away if the staker misbehaves.Like putting down a large rental deposit for an apartment. You get the money back if you behave, you earn interest while it's locked, and the landlord takes it if you trash the place.Staking in the glossary →, and governance) and Petnet (the orchestration layer performing blind computation). nilChain was sunset on ~23 March 2026 and NIL migrated to Ethereum as an ERC-20 tokenTokenA digital unit of value or access rights tracked on a blockchain. Tokens can represent ownership in a project, a right to use a service, a share of future revenue, or simply a tradable asset with no underlying claim.Like a physical poker chip a casino issues. The chip itself has no value. What makes it worth something is what it lets you do at the casino, what the casino has promised, and how much other people will pay you for it.Token in the glossary →. Approximately 843 million of 1 billion tokens have been bridged. The “Nillion 2.0” transition, announced October 2025, has its first live deliverable: Blacklight, a verification layer launched ~2 February 2026 with pioneer verifier nodes (70,000 NIL stake requirement) and the ERC-8004 verification standard. The blind computation modules remain:

• nilDB – Encrypted data storage with permissioned access controls
• nilVM – Blind computation using MPC and homomorphic encryption. Data is split across nodes so no single node sees the complete dataset
• nilAI – Private LLMLLMLarge Language Model. A neural network trained on vast amounts of text to predict the next word in a sequence. Modern LLMs (GPT, Claude, Llama, Qwen, DeepSeek) generate human-quality text and are the foundation of most modern AI products.Like an autocomplete that read every book ever written. It has no memory of individual texts but it has absorbed the patterns of language so deeply that it can generate paragraphs that sound human. The skill is statistical, not conscious.LLM in the glossary → inferenceInferenceRunning a trained AI model to produce an answer. Inference is what happens when you type a prompt into ChatGPT and get a response. The model takes your input, computes a best guess, and returns it.Like asking an expert for their opinion. The training was the decades they spent becoming an expert. The inference is the 30 seconds it takes them to answer your specific question.Inference in the glossary → inside TEEs. Run AI models on your data without the model or infrastructure seeing it

Founded by Alex Page (ex-Goldman Sachs), Andrew Masanto (co-founded Hedera Hashgraph, ex-Linklaters and Rothschild), Conrad Whelan (founding engineer at Uber), Slava Rubin (founder of Indiegogo), Dr. Miguel de Vega (Chief Scientist, 30+ patents in cryptography) and Mark McDermott (ex-Nike).

Leadership has since changed. John Woods, previously CTO of the Algorand Foundation, joined the Nillion Association as CTO and now runs it as CEO. His 4 June 2026 letter to the community says the Association cut headcount, shrank the executive team, reduced monthly burn by about 45% and appointed a new CFO, Matthew Pollard. Woods wrote that the damage to the token was “caused by poor execution, including the actions of an incompetent market maker.”

On 13 October he announced Bruno Martins, also from the Algorand Foundation, as CTO. The June letter still names de Vega as co-founder and Chief Scientist.

Token launched 24 March 2025 via CoinList sale ($0.40 per NIL) and Binance Launchpool. Alpha mainnet went live the same day.

Value proposition

Encrypted Markets and Covenants

On a public chain, a stop loss, a vault’s rebalancing trigger or a sealed bid is readable before it executes. Nillion’s August 2026 roadmap argues that crypto privacy has covered the transaction (who paid whom) but not the execution or the strategy behind it, and Covenants are its answer.

Nillion’s docs describe the mechanism. An author splits a payload into m shares, encrypts each to one Blacklight node’s key, and posts the bundle to Ethereum with a release condition, an ETH escrow for the nodes and a flat NIL protocol fee. Any k of the m nodes can open it together; any k-1 learn nothing. When the condition is met, each node posts its share, anyone can reconstruct the payload, and the contract checks it against a commitment made when it was posted.

Nodes earn ETH from the escrow for each share they post, plus NIL emissions weighted by stake. The NIL fee, 64 NIL per Covenant when we read the contract, is non-refundable and goes to a treasury held by a 3-of-5 Safe.

The docs are candid about the limits of the current version:

• conditions are price thresholds on four assets, BTC, ETH, SOL and USDT per Nillion’s SDK guide (its overview page names USDC rather than USDT), with more promised in later phases
• timing and metadata are public: that a Covenant exists, its committee, its escrow and when each share lands
• a coalition of k nodes can open a payload early, so the author’s choice of committee is the defence
• Nillion’s roadmap says the nodes can read a Covenant’s condition until its Neon phase, scheduled for August to October 2027

Covenants on chain so far

The contracts are live, and we read them. Nillion’s TriggerMarket contract on Ethereum mainnet was deployed in late September 2026. Our weekly read of its state counts 8 Covenants posted, sealed by 3 distinct authors, and 4 of them came from the address that deployed the contract.

The treasury has received 512 NIL in protocol fees across 8 payments, one per Covenant. In mid-October 2026, its first fortnight, that made it a working primitive with no meaningful volume.

The Encrypted Markets roadmap

The roadmap runs in seven phases to early 2028. These are Nillion’s stated plans:

• Dusk (August to November 2026): Covenants on Ethereum mainnet, permissionless staked nodes, baseline tokenomics
• Darkfall (November 2026 to February 2027): the same network across many EVM chains, with jailing and slashing
• Skyglow (February to May 2027): a condition on one chain settling on another, extending to Solana, Move chains and Monero
• Nightside (May to August 2027): any attested data feed as a condition
• Neon (August to October 2027): a Covenants language and VM, conditions hidden from the nodes, slashing for false reveals
• Aurora (October 2027 to January 2028): post-quantum sealing and FHE coprocessors
• Moonshine (December 2027 to February 2028): an order of magnitude less data per Covenant

Delivery has slipped by about a week. Nillion set Dusk mainnet for 28 September, its 26 September migration post moved Blacklight L1 mainnet to 5 October, and the contracts were live with staked nodes when we read them on 7 October.

The blind computer

Privacy-preserving AI computation was the original pitch, and it still runs.

Every major AI modelModelA trained neural network that takes inputs (text, images, audio) and produces outputs (more text, classifications, generated content). In DeAI the model is the thing that actually does the work.Like a very experienced apprentice who has spent years watching thousands of masters make furniture. They can't explain how they know when a joint is right, but they can make a chair that looks and functions like a Chippendale. The training is invisible. The output is what matters.Model in the glossary → today requires your data in plaintext to process it. ChatGPT reads your prompts. Cloud GPUGPUGraphics Processing Unit. Originally designed to render video game graphics, GPUs turned out to be exceptionally good at the massively parallel math that AI models need. Modern AI training and inference runs almost entirely on GPUs.Like a factory with 10,000 workers doing the same simple task in parallel, versus a CPU which is more like 10 workers each doing different complex tasks. AI training involves doing simple math a million times per second on a million numbers, which is exactly what the GPU factory is designed for.GPU in the glossary → providers see your trainingTrainingThe one-time process of teaching a neural network to perform a task by showing it massive amounts of example data and adjusting its internal weights until the outputs are good. Training builds the model; inference uses it.Like the years an apprentice spends learning a trade. You don't see any of the actual work, just thousands of repeated mistakes gradually becoming competence. By the end, the apprentice can do the job. The training was invisible, but the skill is now permanent.Training in the glossary → data. Enterprise AI deployments require trusting the infrastructure with sensitive information. Nillion’s thesis is that it’s fundamentally broken, and that blind computation, where the infrastructure processes data it can’t see, is the fix.

The technical approach combines three privacy-enhancing technologies (PETs):

1. MPC splits data across multiple nodes. Each node holds a fragment that is meaningless alone. Computation happens collaboratively without reassembling the data.
2. Homomorphic encryption enables mathematical operations on encrypted data, producing encrypted results that only the data owner can decrypt.
3. TEEs provide hardware-isolated enclaves where code runs in a protected environment that even the hardware operator cannot inspect.

Using all three is the defence-in-depth argument: if one technique has a vulnerability, the others compensate.

The counter-narrative is practical: blind computation is slow, expensive, and unproven at scale. MPC requires multiple rounds of communication between nodes. Homomorphic encryption adds orders-of-magnitude computational overhead. TEEs depend on hardware vendor trust (Intel SGXSGXIntel Software Guard Extensions. The first widely-deployed TEE technology, introduced in 2015. SGX creates encrypted memory regions (enclaves) where code and data are protected from the operating system and the machine's owner.Like a safe deposit box at a bank. The bank owns the safe room and can see who comes in and out, but they can't see what's inside the boxes. SGX gives applications a private box on a shared computer.SGX in the glossary → has had side-channel attacks; NVIDIA TEETEETrusted Execution Environment. A hardware-secured region of a CPU or GPU where code runs in isolation, so even the machine's operator can't read what's happening inside. TEEs give decentralised AI inference privacy guarantees.Like a bank vault inside a bank. The bank owns the building, staffs the lobby, and runs the security cameras. But what's inside the vault is invisible to everyone, including the bank staff, unless the customer opens it.TEE in the glossary → attestationAttestationA cryptographic proof that a piece of code is running on a specific hardware enclave in an unmodified state. Attestation lets remote users verify that a service is genuinely running what it claims to be running.Like a tamper-evident seal on a medicine bottle. The seal itself doesn't make the medicine safe, but it gives you a way to verify that nobody opened the bottle and swapped the contents before you bought it.Attestation in the glossary → is new). The question isn’t whether privacy-preserving computation is desirable; it obviously is. The question is whether Nillion can make it fast and cheap enough for production AI workloads.

What the blind computer has shipped

As of June 2026 the chain migration is complete, the Blacklight verification layer is live (each node operator stakes at least 70,000 NIL, the minimum set in the staking contract), and the network has moved through a Phase 2 upgrade to a credits-based access model. Reputable node operators run nilDB: Deutsche Telekom, Vodafone, and STC, alongside Nillion itself. Applications exist too (nilGPT, a private AI chatbot, plus LouisAI, Tickr, MonadicDNA, and Stadium Science). Nillion reports 112K+ users, 641M+ documents stored, and 1.4M inferences across the Blind Computer.

Those usage figures are self-reported on Nillion’s blog. They aren’t surfaced on its own public dashboard, which shows node and staking infrastructure rather than usage volume, and the underlying storage and inference activity sits off-chain, so we can’t verify them. The technology is credible and the operator roster is strong; commercial validation in dollars is still absent, and the market maker scandal still hangs over the project.

Paid usage can be measured, and we measured it. Developers buy nilDB and nilCC credits by burning NIL through two contracts named in Nillion’s developer portal, while nilAI credits are paid by card through Stripe and stay off-chain. The contracts send NIL to a dead address, so total supply never falls (1,010,925,416 NIL on-chain, grown through emissions) and no tracker reports a burn. Our weekly read of the contracts’ events counts:

• 49 burns since January 2026, totalling 1.4 million NIL from 24 wallets.
• 47 of those burns came before credits launched on 16 April 2026. Most were scripted rounds: the same set of wallets burning two or three minutes apart, fortnightly, funded largely from one shared wallet we can’t attribute.
• Since the launch, 2 burns from 2 wallets have bought credits, totalling 300 NIL.

In mid-October 2026 the last credit purchase on chain was on 27 May. That is a working payment path with almost no paying developers.

For the sovereignty thesis, Nillion is architecturally one of the strongest projects we have reviewed. Data sovereignty is the foundation of the product. Covenants move the emphasis from your data to your intentions: what you plan to trade, bid or release, and when. That still fits “own your mind”, but the evidence for it is weeks old.

Tokenomics

NIL launched via CoinList ICOICOInitial Coin Offering. A token sale where a project sells tokens directly to the public, usually before any product exists. ICOs dominated 2017-2018 funding and are now mostly replaced by airdrops, IDOs, or fair launches.Like a company selling shares to the public before going public, except with no SEC oversight, no audited financials, and often no product at all. The 2017 ICO boom showed why those guardrails exist in traditional finance.ICO in the glossary → in June 2024, raising $20 million at $0.40 per token (50 million tokens sold). A Binance Launchpool distributed 35 million tokens for free. Total funding across all rounds is approximately $65 million, including a $25 million seed round (December 2022) and a $25 million Series A (October 2024) led by Hack VCVCVenture Capital. Private investors who fund projects at an early stage in exchange for equity or token allocations. VC rounds are typically pre-launch, at steep discounts to any future public price, with multi-year vesting.Like angel investors in a startup who buy shares before the company goes public. They take more risk because the company might fail, so they get a better price. Once the company IPOs they can sell, and the public market pays whatever price it thinks is fair.VC in the glossary → and Distributed Global, with participation from HashKey Capital, Arthur Hayes, and Meltem Demirors.

Total initial supply is 1 billion NIL. There is no maximum supply. The token is inflationary by design: an EmissionsController contract mints new NIL, and Nillion’s docs size the Blacklight reward pool at 0.5% inflationEmissionsNew tokens created and distributed by a blockchain protocol over time as rewards to validators, stakers, or miners. Emissions fund network security and participation at the cost of diluting existing holders.Like a company that pays employees partly in newly printed shares. Every year the total number of shares goes up, which means existing shareholders own a slightly smaller slice of the same company unless the company grows faster than the printing.Emissions in the glossary → of total supply, while the mint role sits with a 3-of-5 Safe and no on-chain vote in the path. Distribution:

• Ecosystem & R&D: 26.5% – validatorValidatorA computer that runs the full blockchain protocol, verifies transactions, and proposes new blocks. Validators are the workers that keep a Proof of Stake network running, and they earn rewards for doing the work correctly.Like a notary public who witnesses and stamps legal documents. Validators witness transactions, check they follow the rules, and stamp them into the permanent record. A notary who commits fraud loses their license. Validators work the same way, except the license is staked tokens that get slashed on misbehaviour.Validator in the glossary → incentives, developer rewards, network expansion
• Early Backers: 21% – seed, pre-seed, and 2024 funding round participants
• Core Contributors: 20% – team and advisors
• Community: 16.5% – airdrops, grants, incentive programmes
• Protocol Development: 10% – ongoing research and development
• Public Sale (CoinList): 5% – $0.40 per NIL
• Binance Launchpool: 3.5% – free distribution
• LiquidityLiquidityHow easily a token can be bought or sold without moving the price. High liquidity means you can enter or exit large positions quickly at the quoted price. Low liquidity means even small trades can swing the market.Like the difference between selling a house and selling a share of Apple stock. The house might be worth more on paper, but finding a buyer at that price takes weeks. The Apple share converts to cash in one click.Liquidity in the glossary →: 2.5% – market making

Circulating supplyCirculating SupplyThe number of tokens currently in circulation and tradeable on the open market. Differs from total supply (which includes locked or unvested tokens) and max supply (the upper limit, if there is one).Like the number of cars on the road today versus the number ever produced. Some are in showrooms, some in junkyards, some still at the factory. Only the ones on the road count toward what people are actually driving.Circulating Supply in the glossary → is 50.27% of total supply per CoinGecko, up from about 44.8% in early May 2026 as the monthly Community tranches continued. The 114.5 million token unlock scheduled for 24 March 2026 (coinciding with the nilChain halt and Ethereum migration) executed on schedule, and Community tranches of 24.5 million a month have followed since April 2026.

The market maker incident. According to Nillion’s own public disclosure, in November 2025 an unauthorised market maker sold approximately 65 million NIL tokens onto the open market, triggering a roughly 50% price crash. Nillion launched a buybackBuybackUsing protocol revenue to purchase tokens on the open market, usually to burn them or return them to a treasury. Buybacks convert business income into upward pressure on the token by reducing circulating supply.Like a public company using profits to repurchase and retire its own shares. The cash leaves the company's balance sheet, the share count drops, and every remaining shareholder owns a slightly bigger slice of the same business.Buyback in the glossary → programme in response, but by 28 November had repurchased only 1.1 million of the 65 million tokens sold, less than 2% of the damage. The token set a new all-time low in August 2026, per CoinGecko. This wasn’t a hack or exploit. It was a failure of counterparty controls. The team allocated tokens for market making and lost control of how they were used.

NIL trades well below both its $0.40 ICO price and its $0.90 all-time high from launch day, so CoinList buyers remain underwater.

Chain migration (complete). nilChain (Cosmos) was halted ~23 March 2026. NIL migrated to Ethereum as an ERC-20 token (contract: 0x7Cf9a80db3B29eE8efE3710AadB7b95270572d47, audited by Quantstamp). The migration was 1:1 via a Merkle proof claim process. Approximately 843 million of 1 billion tokens were bridged to Ethereum. The migration deadline has passed. Cosmos-based staking ended with the nilChain halt. Blacklight pioneer verifier nodes are now live, requiring a 70,000 NIL stake.

Listed on Binance, Gate.io, MEXC, HTX, and Bitget; Coinbase and Bybit list no NIL pair. Over half of reported volume sits on LBank.

How to participate

NIL is now on Ethereum. The nilChain migration deadline has passed. NIL is a standard ERC-20 token. If you still have unmigrated tokens from Cosmos, check migrate.nillion.com for any residual claim process, but the deadline is gone.

Run a Blacklight node. Blacklight nodes now resolve Covenants: they hold encrypted shares, watch the price feed and post their share when a condition is met. Requires staking 70,000 NIL. This is the primary staking mechanism post-migration, replacing Cosmos PoSProof of StakeA consensus mechanism where validators earn the right to create new blocks by staking tokens as collateral. If they misbehave, the network slashes their stake. Proof of Stake replaced energy-intensive mining on most modern chains.Like being a licensed auctioneer. You post a bond to get the license, you earn fees for every auction you run, and you lose the bond if you rig an auction. The bigger the bond, the more auctions you get to run.Proof of Stake in the glossary →.

Blacklight has moved to Ethereum mainnet. Nillion opened the migration from its own L2 on 26 September 2026, and the L1 contracts are live: on 7 October the L1 Staking contract held 7.22M NIL across 21 registered nodes, while 7 operators with 8.58M NIL were still on the L2, which Nillion says halts later in 2026. What changes for operators:

• the 70,000 NIL minimum stays (ProtocolConfig on L1 returns it), but L1 nodes register fresh and need ETH for gas
• L1 rewards come from 0.5% annual inflation plus trigger fees, per Nillion
• staked NIL earns nothing during the bridge back to Ethereum, which Nillion puts at about nine days

Hold NIL. Standard ERC-20 token on Ethereum. Available on Binance, Gate.io, MEXC and other centralised exchanges.

Build on Nillion. Use SDKs (Python, TypeScript, Rust) to build privacy-preserving applications. nilDB for encrypted storage, nilVM for blind computation, nilAI for private AI inference. Developer documentation is actively maintained, and the org publishes 102 public repositories, though 87 of them are the project’s own rather than forks and 66 of those have gone six months untouched. Technical skill: advanced. Ecosystem grants available. Note: the compute layer operates independently of the chain migration. Builders are not affected by the Cosmos-to-Ethereum switch.

Honest assessment

Freedom Score: 51/100

Data sovereignty is the core of the product. But scoring well on paper and performing well in practice are different things. Governance controls failed to prevent a market maker scandal, and real-world decentralisation is unproven at any meaningful scale. The chain migration is complete and Blacklight verification nodes are live, which is progress, but the network still has a lot to prove.

Infrastructure Decentralisation: 11/20. Dual-layer architecture with Petnet compute nodes and the coordination layer now on Ethereum. Blacklight verification nodes are live with pioneer verifiers staking 70,000 NIL, representing a concrete step forward from the previous review. The Petnet layer’s actual node distribution and decentralisation remains unclear in alpha phase. TEE-based nilAI creates hardware vendor dependency (Intel/NVIDIA). The L2 staking contract reported 37 active operators holding about 20.9M NIL on 23 September 2026, and geographic distribution remains unmeasured. Blacklight L1 then went live on Ethereum mainnet: on 7 October its Staking contract held 7.22M NIL across 21 nodes while 7 operators with 8.58M NIL remained on the L2, so the operator set is being rebuilt rather than carried over.

Governance Decentralisation: 7/20. Cosmos governance module was retired with nilChain, and no token vote exists on Ethereum. Control sits with four 3-of-5 Safes, none behind a timelock: one holds the token’s admin, upgrade and mint roles, one can upgrade TriggerMarket, one can pause it, and one receives the Covenant fees. The market maker incident exposed a governance failure: the team allocated 2.5% of supply (25M tokens allocated, 65M apparently accessible) to a market maker without adequate controls, and that entity dumped the lot. 41% insider allocation still concentrates power.

Token Distribution Fairness: 6/15. 41% to insiders is heavy. The market maker incident made it worse: 65 million tokens dumped onto retail holders, with the buyback recovering less than 2%. Public sale investors are down 88% from ICO price. However, the Binance Launchpool allocation (3.5%) provided free distribution to a broad retail base, and all vestingVestingA schedule that locks up tokens allocated to insiders, investors, and team members, releasing them gradually over months or years. Vesting prevents insiders from dumping on public buyers immediately after launch.Like a new employee's stock options at a startup. You don't get all the shares on day one. They unlock over four years so you stick around and do the work rather than cashing out and leaving.Vesting in the glossary → schedules are publicly documented. The distribution is poor but not the worst in the space.

Censorship Resistance: 9/15. MPC-based blind computation is inherently censorship-resistant: nodes can’t inspect or selectively refuse data they can’t see. The cryptographic architecture is one of the strongest censorship-resistance designs in DeAIDeAIDecentralised AI. An umbrella term for blockchain-based projects that build AI infrastructure (compute, data, inference, models, agents) without a single central provider controlling the system.Like the difference between streaming a movie from Netflix and sharing it via BitTorrent. Netflix is fast and polished but one company controls what you can watch and what you pay. BitTorrent is messier but no single operator can shut you out.DeAI in the glossary →. It is also a design, and the token is a deployed thing that can be read: NIL is a UUPS proxy whose implementation a 3-of-5 Safe can replace with no timelock, which means a transfer blacklist that does not exist today is three signatures away.

Covenants have the same shape: the TriggerMarket contract is upgradeable by a separate 3-of-5 Safe with no timelock (the deployer granted it admin and upgrader roles, then renounced its own), and a third 3-of-5 Safe holds its pauser role, which governs a switch on posting new Covenants. Limited further by TEE hardware vendor trust and unproven production-scale decentralisation.

Data Sovereignty: 11/15. This is Nillion’s strongest dimension, and it was scored on the blind-computation stack. MPC ensures no single node sees complete data. Homomorphic encryption enables computation on encrypted data. nilDB provides encrypted storage with permissioned access. nilAI runs LLM inference inside TEEs. One of the best data sovereignty architectures reviewed. Production-scale privacy guarantees aren’t independently verified, but the cryptographic design is among the strongest in the space.

That score is now lower because Covenants carry a weaker guarantee today: a payload is protected only against fewer than k nodes, and the nodes can read its condition until Neon.

Open Source Transparency: 7/15. 102 public GitHub repos. Key repos (nilchain, nilAI, nildb) are public and the primary repo is actively developed, but many repos carry no licence file and most have gone six months untouched. The ERC-20 contract was audited by Quantstamp, the first recognised security audit for any Nillion component. Core cryptographic components may not be fully open-sourced.

Returns Score: 40/100

Token Utility: 13/20. NIL is staked by Blacklight nodes (70,000 NIL minimum), which replaced Cosmos PoS staking and now secure Covenants. Every Covenant also pays a flat NIL protocol fee, and nilDB and nilCC credits are bought by burning NIL, while nilAI takes card payments. Governance utility isn’t live, and paid use is thin: 512 NIL in Covenant fees and 300 NIL of credits since the April 2026 launch. The design ties every product except nilAI to NIL; the score weighs that design against minimal use.

Value Accrual: 8/20. Cosmos inflation-based staking rewards ended. Blacklight staking is live but fee distribution isn’t implemented, and the credit burn has removed only 300 NIL since credits launched in April 2026. Covenant trigger fees go to node operators in ETH; nothing reaches NIL holders who don’t run a node. No buy-and-burn mechanism. Value accrual remains indirect and aspirational.

Supply Dynamics: 5/20. No max supply. 50.27% circulating (CoinGecko) with monthly Community tranches of ~24.5M still releasing. According to Nillion’s own disclosure, an unauthorised market maker sold 65 million tokens in November 2025, crashing the price ~50%. The buyback programme recovered only 1.1 million tokens, 1.7% of what was sold. That’s not a recovery; it’s a gesture. The only burnBurnPermanently removing tokens from circulation by sending them to an address that no one controls. Burns reduce total supply, which (all else equal) makes each remaining token worth more of the network's value.Like a company buying back its own shares and shredding them. The company's total value stays the same, but each remaining share now represents a slightly bigger slice of that value.Burn in the glossary → is the credit purchase path, which has taken 1.4 million NIL out of circulation, almost all of it before credits launched. Token trades far below its ATHATHAll-Time High. The highest price a token has ever reached. ATH is usually quoted as a reference point for how far the current price has fallen (or risen) since the peak.Like the record lap time on a racetrack. It tells you what the car has been capable of at its absolute best, not what it will do today. Whether that record gets broken again depends on conditions that may or may not come back.ATH in the glossary → and ICO price. The market maker incident demonstrated that token allocation controls were inadequate.

Revenue Sustainability: 7/25. No verifiable protocol revenue. A Phase 2 credits model is live (NIL burned for nilDB and nilCC, nilAI via Stripe). On chain, 2 credit purchases totalling 300 NIL have been made since the April 2026 launch, and nilAI’s card revenue is unpublished. Nillion reports usage (112K+ users, 641M+ documents, 1.4M inferences), though it’s self-reported and off-chain, not measurable, and absent from DeFiLlama and Token Terminal. Score reflects functional infrastructure and a live monetisation path with no verifiable revenue yet.

Liquidity & Access: 7/15. Listed on Binance, Gate.io, MEXC, HTX and Bitget. Coinbase and Bybit do not list NIL at all, checked at both venues rather than read off an aggregator, so the coverage is narrower than a tier-1 roll-call suggests. Depth is also concentrated: LBank carries more than half of reported volume, over three times Binance. The chain migration is complete with ~843M tokens on Ethereum. Liquidity has consolidated on the ERC-20 token.

Quadrant: D (Low Freedom, Low Returns)

Nillion has dropped from Quadrant B to Quadrant D. The privacy architecture remains strong in theory, but the market maker scandal damaged trust, governance controls proved inadequate, and the token economics are in disarray. Blacklight’s launch is a step in the right direction; the operational failures and the absent revenue still stand. This is a project with a credible thesis that still needs to prove it can execute. Covenants give it a concrete, measurable product to do that with.

Key risks

• Market maker scandal. An unauthorised market maker dumped 65 million NIL tokens in November 2025, crashing the price ~50%. The buyback programme recovered 1.1 million tokens, less than 2% of the damage. This was a failure of counterparty controls, not a hack. It raises serious questions about team oversight of token allocations.
• Pivot risk. Nillion has described itself as a blind computer, its own chain, an Ethereum L2 and now Encrypted Markets in about 18 months. Covenants are live but only 8 have been posted, and the trading flow they target sits on venues that could build hidden orders themselves.
• Node collusion. Any k nodes in a committee can open a Covenant early, and every node can read its condition until Neon (late 2027). Slashing for false reveals is also a Neon item.
• Post-migration unknowns. nilChain halted ~23 March 2026. ~843M of 1B tokens bridged to Ethereum. The migration deadline has passed. Users who missed it may have lost access to their tokens. Blacklight verifier staking is live but the broader Nillion 2.0 tokenomics are still being finalised.
• No verifiable revenue. The investment case rests on future adoption of blind computation at scale. Phase 2 added a paid credits model, but on-chain credit purchases since launch are near zero, nilAI’s card revenue is unpublished, and the reported usage is self-reported and off-chain.
• Token deep underwater. Trades well below the $0.40 ICO price and the launch ATH. Set a new all-time low in August 2026. Investors who bought the CoinList sale are deeply underwater.
• Insider overhang. 41% allocated to Core Contributors and Early Backers. 114.5M token unlock coinciding with the chain migration in March 2026.
• Nillion 2.0 is early. The October 2025 announcement promised permissionless nodes, new tokenomics, burn mechanisms, and community governance. Blacklight verification nodes launched February 2026, which is a concrete deliverable. A credit burn exists but is barely used, and fee distribution and full community governance remain unimplemented. The tokenomics review is still in progress.
• Blind compute is unproven at scale. MPC is slow. Homomorphic encryption is computationally expensive. Whether these technologies can support production AI workloads at competitive prices is the open question.
• TEE vendor dependency. nilAI relies on Intel/NVIDIA TEE hardware attestation. Hardware side-channel attacks are a known attack surface.
• Competition. Phala Network, Oasis Network, and Secret Network are all in the privacy compute space with more mature networks.

Score change log

Date	Score	Change	Reason
2026-10-15	Freedom	56 → 51 (C → D)	Governance 10 → 7, Censorship Resistance 10 → 9, Data Sovereignty 12 → 11: no token vote, four 3-of-5 Safes with no timelock control the token, Covenant contracts and fee treasury, and Covenants hold only while fewer than k nodes collude.
2026-10-15	Returns	41 → 40	Token Utility 14 → 13: Covenants need NIL for a flat protocol fee and nodes stake it, but governance isn’t live and paid use is minimal.
2026-10-15	Data	N/A	Corrected “Covenant users never need NIL”: each Covenant pays a flat 64 NIL protocol fee to a 3-of-5 treasury Safe (ProtocolConfig.protocolFee, measured on every post). Live assets corrected to BTC, ETH, SOL and USDT per Nillion’s SDK guide.
2026-10-15	Data	N/A	Measured NIL credit burns on chain via the two contracts Nillion’s developer portal names, replacing “no burn total is published”: near zero since the April 2026 credits launch.
2026-10-15	Data	N/A	Re-framed around Nillion’s Encrypted Markets pivot: Covenants live on Ethereum, Blacklight nodes now resolve them, and John Woods is CEO after the 2026 reset.
2026-10-07	Data	N/A	Blacklight L1 is live on Ethereum mainnet: 21 nodes and 7.22M NIL staked on 7 October, 70,000 NIL minimum confirmed on chain; the L2 is down to 7 operators. Scores unchanged.
2026-10-04	Returns	Liquidity & Access 8 → 7 (Returns 42 → 41, D held)	Coinbase and Bybit spot do not list NIL, contrary to our old evidence, and LBank carries about half the reported volume.
2026-09-29	Data	N/A	Blacklight moving from Nillion’s L2 to Ethereum L1: migration opened 26 Sep, L1 mainnet set for 5 Oct, L2 to halt later in 2026 (Nillion). Infrastructure 11/20 held until the L1 set is live.
2026-09-24	Data	N/A	Supply and price lines refreshed: Ethereum NIL supply is above 1B through emissions (0.5% reward pool per docs), circulating now bound live, the ATL moved to August 2026, and the stale 94.5%-from-ATH and FDV-below-raised lines were removed. Blacklight now 37 operators. Scores unchanged.
2026-09-23	Data	N/A	Integrity records re-cut: 2 claims now quote Nillion’s own pages verbatim and 5 are our own measurements. Scores unchanged.
2026-09-07	Data	N/A	WS3b open-source rail: the March 2026 activity date is six months stale in the project’s favour, with pushes to nilvm this week. Less flattering: 27 repos carry no licence file and 66 of 87 have gone six months untouched. Open Source 7/15 held.
2026-09-07	Data	N/A	WS3b censorship rail: the censorship case rests on the MPC design, and the deployed token points the other way. NIL is a UUPS proxy a 3-of-5 Safe can replace with no timelock, so a transfer blacklist is three signatures away. Censorship Resistance 10/15 flagged for October.
2026-09-06	Data	N/A	Research JSON resynced to the frontmatter Returns breakdown. Supply Dynamics 7 and Liquidity & Access 10 in the JSON predate the 2026-03-12 Returns 46 to 42 move, which took two points off each. No published score changed.
2026-09-06	Data	N/A	WS3b distribution rail: on-chain top-10 verdict added, with an explicit limit. Nine of the top ten addresses carry no explorer label, so the measured insider share of 0% reflects missing attribution rather than absent insiders. Raw top-10 56.29%, infra-excluded 44.35%, 4,138 holders. Token Distribution Fairness 6/15 held.
2026-09-06	Data	N/A	WS3b liquidity rail: Coinbase returns NotFound for NIL-USD and NIL-USDC and Bybit spot returns no NILUSDT instrument, so both are removed from the venue lists (Binance confirmed trading). LBank carries 52.3% of reported volume, which is what the 42.78% turnover ratio measures. Liquidity & Access 8/15 flagged for October.
2026-08-13	Data	N/A	Re-authored the staking verdict, which described the nillion-1 Cosmos chain. That chain was halted on 23 March 2026 when NIL migrated to Ethereum, so the “endpoints unreachable” we recorded in June was a decommissioned network, not a flaky one. Now records Blacklight L2 staking (70,000 NIL minimum). The telcos run PetNet nodes, not validators.
2026-08-13	Data	N/A	The staking verdict describes a chain that no longer exists: NIL migrated off nilChain to Ethereum with a planned halt on 23 March 2026, and staking is now Blacklight nodes on the L2. The telco operators are real but run PetNet nodes, not nillion-1 validators. Re-author at the monthly.
2026-08-13	Data	N/A	On-chain check of the NIL token: it is a UUPS-upgradeable proxy whose admin, upgrader and minter roles all sit with one 3-of-5 Safe, with no timelock, and Nillion documents none of it. The deployer has renounced its roles. Migrated Nillion onto the verdict spine.
2026-07-01	Data	N/A	July monthly review supply refresh (executing the snapshot update deferred in the 2026-06-24 row). Circulating updated 44.84% (~448.4M, stamped early May 2026) → 48.74% (~487.4M) per CoinGecko 2026-07-01, reflecting the continued monthly ~24.5M Community unlocks (May and June tranches). A ~3.9pp move, below the 5pp hard-drift threshold but stale by two unlock cycles. No score change: Supply Dynamics (5/20) already prices in the ongoing unlock pressure, no-max-supply and no-burn structure.
2026-06-24	Data	N/A	Usage-claim correction (LlamaAI cites this page). Verified Nillion DOES publish usage figures (112K+ users, 641M+ documents, 1.4M inferences); the prior “no usage metrics published” line was wrong. Confirmed those figures are self-reported (blog only, NOT on Nillion’s own dashboard, off-chain) and not independently verifiable. Phase 2 credits model added (NIL burned for nilDB/nilCC, nilAI via Stripe); no public burn or revenue figure exists (Ethereum NIL fixed at 1B, tokenomist.ai reports no burns, nilAI revenue is off-chain Stripe). Added verified anchors: Blacklight 13.8M NIL staked / 41 nodes / ~36% APY, named operators Deutsche Telekom, Vodafone, STC. “No verifiable revenue” and “no DeFiLlama/Token Terminal presence” both still hold (the basis the tool cites). Score unchanged; any Revenue Sustainability reassessment and the stale supply snapshot (now ~48.7% circulating) deferred to the 1 July monthly.
2026-06-02	Data	N/A	Stale unlock date refreshed: the 24 May 2026 24.5M Community unlock executed; next unlock now 24 June 2026. Circulating ~46.8% per CoinGecko (within tolerance of the dated 44.84% snapshot; left as-is). Score unchanged. June monthly review.
2026-05-03	Data	N/A	Circulating supply corrected from 31.45% (~314.5M) to 44.84% (~448.4M). Verified against CoinGecko and Tokenomist. The 24 March 114.5M unlock and the 24 April 24.5M Community unlock both executed on schedule; next unlock 24 May. Editorial body, TokenFactsStrip and Supply Dynamics evidence updated. Score unchanged; dimension already prices in unlock pressure and the November 2025 MM incident.
2026-04-06	Data	N/A	nilChain shutdown confirmed (~23 Mar), Ethereum migration complete (~843M tokens bridged), Blacklight verification layer live (Feb 2026). Editorial corrections throughout.
2026-03-12	Freedom	60 → 50	Market maker scandal (65M tokens dumped), chain migration from Cosmos to Ethereum, governance controls failed. Dropped from Quadrant B to D.
2026-03-12	Returns	46 → 42	Token down 94.5% from ATH, buyback recovered only 1.1M of 65M dumped tokens, zero demonstrated revenue.
2025-03-06	Both	N/A	Initial publish. Freedom 60/100, Returns 46/100.